Shumlin reflects on single payer failure

MONTPELIER — Former Vermont Gov. Peter Shumlin said money, wary lawmakers and timing were the core challenges that ultimately caused his failure to deliver on a promise to implement a single-payer health care system in the state.

The former Democratic governor reflected on that failure Tuesday at a forum at Harvard’s T.H. Chan School of Public Health. Shumlin ran for governor in 2010 on a platform that promised voters a single-payer system.

Former Vermont Gov. Peter Shumlin speaks at Harvard’s T.H. Chan School of Public Health on his failed effort to implement a single-payer health care plan in Vermont. (Screen shot from live stream)

But he announced after his 2014 re-election bid that his administration would not be moving forward with the plan. He cited the tremendous cost of the program and the burden that would be placed on the state’s limited tax base. Shumlin limped through his second re-election bid and ultimately declined to seek a fourth term in 2016. He has largely retreated from public life since the inauguration of Republican Gov. Phil Scott in January.

Shumlin said after spending years developing a system and a financing plan, it proved to be too costly for Vermonters to accept.

“When you actually get into the numbers and you describe to your people when you move to a premium-driven system to one that’s supported by taxes, the tax rates in Vermont were quite staggering compared to what other people were paying,” Shumlin said. “When I came out and said, ‘Listen, to move from a premium-driven system to a tax-based system you’re going to have an 11.5 percent payroll tax, you’re going to have to have a top 9.5 percent income tax on top of our current state income tax,’ I don’t think that was even the biggest problem.’”

The bigger problem, Shumlin said, was wary lawmakers who feared yearly tax increases to support the system because of growing health care costs.

“I couldn’t with a straight face turn to them and say, ‘No, we’ve got this figured out. There’s going to be so much cost-containment you won’t have to do that,’” the former governor said.

The tax rates Vermonters were facing were a challenge. Even Progressive lawmakers, who have long sought a single-payer system, were wavering, Shumlin said.

“When you have neighboring challenges, it’s very tough to make the sale to legislators and constituents, ‘Hey this is a great thing, you’re finally going to have health care as a right and not a privilege, but you’re going to have tax rates that are quite high, replacing premiums so it’s not money that you’re not spending now, but there’s winners and losers,’” he said.

“I couldn’t get the votes. There was no way I was going to get the votes either in the [Vermont] House or the Senate to pass the single payer plan I wanted,” Shumlin added.

Another fiscal challenge also loomed large — how to build a big enough reserve for the expensive health care system. Shumlin said his administration determined that it would require all of the state’s bonding capacity for a decade to secure a reserve large enough to support the system. That would have prevented the state from bonding for infrastructure improvements during that time.

“We literally would have had to said to Vermonters to build that reserve there can be no investment in infrastructure for a decade because we need that money,” Shumlin said.

The changing political winds in Washington was another factor. Shumlin said the Republican takeover of the House and Senate limited the Obama administration’s ability to work with Vermont.

“The [Health and Human Services] secretary said to me, ‘Listen, we want to work with you, we wanted to work with you, but we don’t have the capacity to cut out special deals for Vermont while we’re up there on the hill trying to defend Obamacare,” Shumlin said.

Shumlin, like other governors, was also reeling from the disastrous rollout of the state’s online insurance exchange. The technology envisioned in the Affordable Care Act was not ready. Shumlin labeled the exchange Tuesday as “my biggest downfall.”

“There was no amending Obamacare because the Republican Congress refused. The result was we all had exchanges that blew up,” he said. “I lost tremendous credibility as a leader on health care when I couldn’t deliver something as simple, theoretically, as expanding the insured under Medicaid.”

Ultimately, Shumlin said he had to make a policy and political decision to pull the plug on his promise.

“All those things came together so that I couldn’t look Vermonters in the eye and say this is the time to make this step,” he said. “Those things all came together to deliver the most difficult thing I’ve ever had to do, which is turn to the people that elected me and say, ‘We’ve done the work, we’ve done the research, we know how the system would work. This is not fiscally responsible to do in Vermont right now.’”

Shumlin said he opted against forcing the issue on lawmakers who were likely to kill the proposal.

“I chose not to do that. I just felt that really, this was my idea, I owned it and I needed to own its failure,” he said.

Shumlin said he hopes political leaders will push for a national single-payer system as an economic issue and beyond its long-time status as a “fringe, lefty issue.”

“I was wrong. I don’t think little states like Vermont can go it alone,” he said. “I do think that the Vermont story should be an example of how a little state tried, learned, and the lesson should not be no, it should be Hell yes, let’s get it done and let’s do it right, let’s give this benefit to all Americans.”

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